Posted originally on May 14, 2025 by Martin Armstrong 

President Trump’s Executive Order 14218 (February 2025) prohibits undocumented migrants from receiving federal funds. However, individual states are not prohibited from funding migrants, and several blue states are continuing to use state funds for such purposes. There is a grey area here as these states are incentivizing illegal settlement, but at the moment, the law seeks to ensure that only federal funds are not distributed to illegal settlers.

California may be in the midst of an energy and debt crisis, but Governor Gavin Newsom continues to fight Washington on behalf of migrants. California’s Cash Assistance Program for Immigrants (CAPI) provides cash payments to migrants who are ineligible for Social Security. Is this program using federal aid? The Department of Homeland Security has subpoenaed the past four years of records to determine if migrants resisting in Los Angeles have been receiving cash payments at the expense of our federal budget.

DHS Secretary Kristi Noem said that the subpoena for Los Angeles is merely the beginning of their ongoing search. “The Trump Administration is working together to identify abuse and exploitation of public benefits and make sure those in this country illegally are not receiving federal benefits or other financial incentives to stay illegally.” She continued, “If you are an illegal immigrant, you should leave now. The gravy train is over.”

A memo from the White House last month revealed that the American taxpayers have been paying $182 billion annually to cover all expenses for 20 million migrants, based on research from the Federation for American Immigration Reform (FAIR). The study found that the $182 billion included $66.4 billion in federal assistance, with state and local expenses reaching $115.6 billion.

People residing in blue states may not realize that their tax dollars are still being used to support people who illegally entered the nation, cannot apply for work, and are living a taxpayer-subsidized life.

In March 2025, Newsom requested a $3.44 billion loan from the general fund, the maximum loan amount permitted under California law, to pay for social programs. An additional $2.8 billion in state funding has already been committed to cover June costs. He is spending funds faster than they can be collected. Newsom has proposed numerous tax hikes, but they could never amount to his perpetual spending.

Instead of focusing his attention and resources on Americans who have paid into the system their entire lives, Newsom has ulterior motives. He approved of spending $10 billion on health care costs alone for migrants.

Every agency involved in California’s finances has warned Newsom that his spending will destroy the state. Spending over the past five years has skyrocketed by 63% to $200 billion. I reported that the Legislative Analyst Office (LAO) found that California is facing “double-digit operating deficits in the years to come” as a result of reckless government spending.

California’s debt will rise when the federal government removes any funding misdirected toward non-citizens. There is a grey area here where states are openly encouraging illegal settlement through incentives from their taxpaying, legal residents. The Department of Homeland Security may still deport these migrants, but as we have seen in recent weeks, blue states will not relent.